The account “%1” does not have the correct permissions to modify the Exchange ActiveSync service privileges. Check the assigned permissions for the account that is running the Exchange ActiveSync ASP.NET process. Error code: “%2”.

This Error event occurs when the account that is running the MSExchangeSyncAppPool application pool worker process does not have the correct permissions to run the Exchange ActiveSync service correctly. The MSExchangeSyncAppPool application pool worker process must run under the LocalSystem account to provide access across domains and other functionality.

When you install Microsoft Exchange 2007, all Exchange application pools run under the LocalSystem account.

To resolve this error, make sure that the Exchange ActiveSync ASP.NET process is running the LocalSystem account by doing the following:

1. Click Start, click Administrative Tools, and then click Internet Information Services (IIS) Manager.

2. Double-click to expand the server name, and then double-click to expand the Application Pools folder.

3. Right-click MSExchangeSyncAppPool, and then click Properties.

4. On the Identity tab, click Predefined, and then click LocalSystem.